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Why can Dandara advertise 5% returns without risk warnings?


On Friday, March 8th, Ben Shenton on LinkedIn asked a question many people ask me about.

Ben’s question is as follows in the link and screenshot below. My answer is in the thread of LinkedIn and also copied below the screenshot.

Good morning. Thank you for your question. I agree with your wife's opinion on this matter. To answer your question about why Dandara can publish an advert without proper warnings, it's crucial to understand that the reason is not related to the JFSC but to the Jersey government and its laws. The JFSC only regulates the entities that fall under its jurisdiction, which is based on a twin peaks model: SCH2/AML and financial services/banking/insurance. SCH2 deals with AML/CTF/CPF issues but not with advertisements like Dandara's. Therefore, we need to examine the laws governing investment advertisements for financial services/banking/insurance. If we exclude banking and insurance [due to space limitations of linkedin], we can focus on financial services.

The Jersey Financial Services Law (FSJL) defines "Financial Service Business" as a range of activities related to financial services. However, for your wife's question, consider "investment business" [IB]. IB covers services such as investment advice, managing investments, or advising on investments. The FSJL SCHEDULE 1 defines an investment, and guess what: "PROPERTY" is not included. If what is being offered is misleading or worse, I guess [I’m not a lawyer] there are legal mechanisms, but these, I presume, will fall to the police.

In closing, I'd like to share a notable case [2012] involving Mr Ian Christmas, a magistrate who was found guilty of fraud. Mr Christmas and three other men were convicted of defrauding investors. They led investors to believe they were investing in property abroad. Specifically, Mr Christmas was found guilty of defrauding one person of £100,000. This case is a stark reminder of the risks involved in investments, especially regarding non-regulated properties. It underscores the importance of thorough assessment and caution in such matters. [NB. There are other similar cases over the years]

So, my conclusion for your wife is this: While the FSJL & the JFSC aim to protect investors, any high-return investment, especially in non-regulated properties, carries inherent risks that should be carefully assessed before making any decision. It's important to exercise due diligence, verify claims, and be cautious of schemes promising extraordinary returns. Understanding the legal framework and seeking professional advice is essential when evaluating investment opportunities. There is a chap called Ben who you could speak to.

Finally, my disclaimer. For anyone reading this and thinking that I am giving some legal professional opinion or guidance. I am not.  Also, to avoid doubt, I am not suggesting that Dandara is doing anything wrong. My posts are my reflections and musings on a Saturday morning [after a good Friday night out], and they are not meant to be taken as legal advice or anything like that.  😁


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